Wynyard Potash Project

Investment Highlights

The Wynyard Project offers prospective investors exposure to a long-life, Saskatchewan-based potash and magnesium development opportunity supported by an updated feasibility study and NI 43-101 Technical Report effective November 26, 2025. The project is designed as a phased solution mining operation capable of scaling from 675,000 tonnes per year in Phase 1 to 2.175 million tonnes per year at full buildout, producing premium white granular muriate of potash grading 97% KCl. Key investment attributes include a projected 70-year mine life, a large defined reserve and resource base, a secured long-term potash offtake agreement, potential high-value magnesium co-product production, access to established regional infrastructure, and a waste-management design that avoids conventional surface tailings piles.

Strategic Location and Land Position

Karnalyte Resources Inc. holds a 100% interest in the KLSA 010, KL 246 and KL 247A mineral leases, covering approximately 36,731.56 hectares, or about 367 km², near Wynyard, Saskatchewan. The company also owns approximately 3,782 acres of surface rights in the project area. Located about 175 km east of Saskatoon and approximately 65 km east of Nutrien’s Lanigan potash mine, the Wynyard Project is situated in one of the world’s most established potash jurisdictions. Its proximity to provincial roads near Highway 16, rail, power, natural gas and water infrastructure supports a practical development setting and strengthens the project’s logistics profile for North American and export markets.

Reserve Base Supporting Long-Term Supply

The Wynyard Project contains three potash-bearing horizons approximately 900 m to 1,100 m below surface: the Patience Lake Member, the Belle Plaine Member and the Esterhazy Member. The updated NI 43-101 technical report supports a projected 70-year mine life based on Proven and Probable Mineral Reserves of 777.1 million tonnes of mineralized material grading an average 12.4% K2O and 7.8% MgO. This reserve base provides the foundation for a long-duration production platform, supporting the potential for stable supply, future expansion optionality and sustained stakeholder value creation.

Resource Scale and Upside Optionality

In addition to Mineral Reserves, the technical report discloses substantial in-situ Mineral Resources reported inclusive of Mineral Reserves, including 1,162.4 million tonnes Measured, 1,789.9 million tonnes Indicated and 3,902.1 million tonnes Inferred. This broader resource inventory provides visibility into the scale of the mineral system and supports potential long-term optionality beyond the current reserve-based mine plan. The combination of defined reserves and significant additional resources positions the project as a substantial, multi-decade development opportunity in a recognized potash basin.

Water Supply and Development Readiness

Process water for solution mining, processing and related operations is expected to be sourced from the Blairmore aquifer, approximately 500 m below surface. Karnalyte has drilled and tested two water source wells in the Mannville/Blairmore interval, and the technical report indicates that the formation is suitable to support solution mining operations. Additional water source wells are expected to be required as the project advances to full-scale operations, but the existing testing provides an important technical foundation for future development planning.

Phased Production Growth

The potash processing facilities are designed to produce premium white granular muriate of potash grading 97% KCl, equivalent to 61.3% K2O. Phase 1 is designed for 675,000 tonnes per year of 97% KCl product, with Phase 2 and Phase 3 each adding 750,000 tonnes per year to reach total planned potash production capacity of 2.175 million tonnes per year. This phased development profile provides a clear growth pathway: Phase 1 establishes commercial production, Phase 2 expands capacity in Year 3, and Phase 3 further expands capacity in Year 5. The process flowsheet includes insolubles and blanketing fluid removal, evaporation, crystallization, drying, compaction, product storage and loadout.

Compelling Project Economics

The updated feasibility study indicates positive project economics and a significant long-term value proposition. The report estimates total initial capital costs of approximately $4.19 billion, including $3.96 billion for potash processing facilities over three phases and $231 million for the magnesium processing facility. Life-of-mine operating costs are estimated at approximately $134.01/t for the potash project and $318.04/t for the magnesium processing facility. Under the assumptions used in the report, the project generates an after-tax NPV of $2.04 billion at an 8% discount rate, an after-tax IRR of 12.5%, and a payback period of 8.8 years. A potash-only reference case also remains positive, with an after-tax NPV of $1.50 billion at an 8% discount rate, an IRR of 11.6%, and a payback period of 9.3 years. These metrics demonstrate economic resilience while preserving upside from magnesium development.